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The Cost of NOT Owning Your Home

Ross Wilhelm

Ross is the Lead Buyer's Agent for the Crawford & Lee Team and has more than 23 years of experience in New Home Sales and a vast knowledge of con...

Ross is the Lead Buyer's Agent for the Crawford & Lee Team and has more than 23 years of experience in New Home Sales and a vast knowledge of con...

Feb 82 minutes read

Owning a home has great financial benefits. Because of this, more and more experts are growing concerned about the ramifications of a falling home-ownership rate. Today, let’s look at the financial reasons why owning a home of your own has been a part of the American Dream for as long as America has existed.

The outcomes of a falling home-ownership rate can be devastating. AsexplainedbyApartmentList.com:

“Our research indicates that not owning a home has a sizable financial cost, as renters miss out on low mortgage rates and are hit by higher rents.

This phenomenon may exacerbate inequality in our society, as those wealthy enough to invest in real estate benefit from lower interest rates, whereas minorities and younger Americans, hit by rising rents and student debt, risk being locked out of home-ownership.”

What proof exists that owning is financially better than renting?

1. Astudypublished by theJoint Center of Housing Studies at Harvard Universityshows the financial benefits of home-ownership.The study mentions five major financial benefits:

Housing is typically the one leveraged investment available

You're paying for housing whether you own or rent

Owning is usually a form of “forced savings”

There are substantial tax benefits to owning

Owning is a hedge against inflation

2. Studieshave shown that homeowners have a net worth that is 45X greater than that of a renter.

3. Just last month, weexplainedthat a family buying an average priced home this past January could build more than $46,000 in family wealth over the next five years.

4. Some argue that renting eliminates the cost of taxes andhome repairs. Every potential renter must realize that all the expenses the landlord incurs are baked into the rent payment already –along with a profit margin!!

Bottom Line

Owning a home has always been, and will always be better from a financial standpoint than renting.

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